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Belong’s Essential Guide To Property Management, Chapter 2, Part 1

Written By
Belong on Dec 18, 2021
In Chapter 2, Part 1 of Belong's Essential Guide to Property Management, we examine how to research and choose the best property manager for you.

So you’ve contemplated self-managing your property, weighed the pros against the cons, imagined what your life would be like if you made that decision: thought about fielding phone calls from your tenants at all hours of the night, trying to deal with emergencies and catastrophes that you aren’t trained to handle, running down contractors who are too busy to work with you, et cetera. 
Upon deep reflection, you’ve realized that “passive income” is a huge misnomer – there’s nothing at all passive about acting as a landlord. 
With all that in mind you’ve decided the best solution for you is to hire a property manager.
If that’s the right decision for you – and it’s not for everyone – the question then becomes, how do you find a dependable, trustworthy property manager?  How do you make sure that your decision doesn’t backfire, and you actually succeed in making your life simpler?

In this chapter of Property Management 101, we’ll answer that very question. 

How to research property management companies
Step 1: Networking
The first step to finding a property manager should be utilizing your personal network to surface some names. 
Do you know any other landlords in the area?  Or renters, for that matter. They will have a great perspective on the quality of service provided by the company that manages the building or home they live in.  Real estate brokers also have a bird’s eye view. 
Of course, your research shouldn’t stop there.  If you’re reading these words that means you’re on a computer or a mobile phone that is connected to the internet.  Little known fact: you can use the internet to research all kinds of inquiries and questions.  Start by checking out the property managers recommended to you by your personal network — see if their online reviews and reputations match up with the anecdotal advice you’ve received.
A personal recommendation is useful, but it’s not always projectable.
You own a home.
We have someone to ❤️  it.
Step 2: A Deeper Dive
Through the course of Step 1 you might have developed a tight list of potential candidates.
If networking hasn’t turned up any leads, you might want to do some extra sleuthing on internet. That’s risky though, for obvious reasons. The names that pop up aren’t always the best, but often the companies who invest the most in marketing, or know how to work successfully with the Google algorithm.
 The next step is to conduct an informal background check by consulting with various governmental and trade associations, to see if the property managers you’re looking at are properly certified and have a solid standing in the industry.  These databases are available online.  We also advise consulting with the Better Business Bureau.
Every state has its own laws regarding the certification of property managers: for more information on the requirements specific to your state check the links collated here . There is a handful of national trade associations that you should consult with, too. The most prominent association by far is the National Association of Residential Property Managers
You don’t have to be a member of these groups to do business as a property manager, so it shouldn’t necessarily disqualify a candidate if they aren’t. But that being said, if they are completely unaffiliated, it’s something of a red flag.
Finally, while you’re doing online research for property managers, it isn’t a bad idea to take a look at their websites. There are occasionally some excellent old-school property management companies who don’t have the strongest online presence, but a nicely designed site that is user-friendly is never a bad sign.

Step 3: Interviews
We’ll dive deeper into the subject of interviews in the coming chapters, but it’s critical that you get some face-time with the property managers you’re thinking about hiring. 
Of course you want to get a sense of how they present themselves — how serious they feel, how organized they seem, how professional their case histories are.  But it’s imperative to ask specific questions about their performance. 
What are their vacancy periods on average?  How long do the leases they manage tend to last?  How do screen applicants and handle evictions if things go south? How many units do they manage,  how big is their staff, and how many properties does the average manager get assigned to them.
Some other areas to probe:  How they process maintenance requests, what kind of contractor network do they have,  whether or not they mark up those services.
And of course the ultimate question – what is the fee structure , and what services are included?  The average rate is between 6 and 10 percent; also some property managers nickel and dime you to death – changing extra for finding tenants, for generating leases, for staging. 

Our Advice

Our advice: think of all the questions you want to ask ahead of time, make a list, and systematically go through it over the course of your interview.  It’s very easy to get frazzled when you’re talking to an expert and you aren’t one yourself. That being said, you mustn’t be afraid to ask potentially dumb questions.  You want to feel wholly confident in the people you’re hiring, and if that means exposing your own ignorance, well, that’s how you get smarter and end up a more sophisticated homeowner.
In the next section of this chapter, we’ll go over exactly what level of service you should expect from them.  So stay tuned!
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